Tank Talks with Matt Cohen
Tank Talks By Ripple Ventures
News Rundown 2/24/25: BDC Capital Goes Big On Growth, CVCA's VC Trends Show Problems, High Speed Rail Going Nowhere Fast, and Cohere vs The Media Giants
1
0:00
-24:32

News Rundown 2/24/25: BDC Capital Goes Big On Growth, CVCA's VC Trends Show Problems, High Speed Rail Going Nowhere Fast, and Cohere vs The Media Giants

Episode 237
1

Matt Cohen and John Ruffolo talk about the BDC Capital $1B fund, the state of early-stage VC funding in Canada, and the rise of mega-deals dominated by U.S. investors. They also discuss the feasibility of the Quebec City-Toronto high-speed rail project, AI copyright lawsuits, potential Trump-era tariffs, and the future of open banking in Canada.


Key Topics

BDC Capital’s $1B Growth-Stage Investment Fund (00:42)

  • BDC Capital announces a $1B investment fund, with:

    • $500M Growth Venture Fund for direct investments and co-investments.

    • $450M Growth Equity Partners Program for minority stake investments in mid-market companies.

  • Concerns were raised by Mark McQueen about lack of early-stage funding

  • John Ruffolo’s take:

    • Canada’s early-stage VC ecosystem is underfunded.

    • BDC was meant to focus on riskier, early-stage investments, while EDC (Export Development Canada) focused on growth-stage.

    • Shift towards later-stage funding may leave early-stage startups without necessary capital.

Canadian Venture Capital Funding Trends (04:55)

  • CVCA’s 2024 report:

    • $7.86B invested across 592 deals, up 10% from 2023.

    • Mega deals ($50M+ rounds) comprised 62% of total VC investments.

    • Seed-stage funding fell 50% to $510M.

  • Notable mega-deals:

    • Clio – $1.24B Series F

    • Cohere – $616M Series D

    • Blockstream – $289M convertible note

    • Waabi – $275M Series B

  • U.S. investors dominate:

    • 32% of Canadian VC deals had U.S. investor participation.

    • Clio’s round was entirely U.S.-funded.

  • John Ruffolo’s analysis:

    • Canada needs stronger domestic venture capital.

    • U.S. capital will always flow into late-stage companies, but early-stage funding is crucial for long-term ecosystem growth.

    • Lack of Canadian IPOs in 2024 is a concerning sign.

Quebec City-Toronto High-Speed Rail: $90B Boondoggle? (09:17)

  • Massive infrastructure proposal:

    • $60B–$90B price tag, with $3.9B allocated to planning alone.

    • Construction won’t begin for at least five years, taking 5–7 years per segment.

  • Criticisms:

    • Timing is political (announced right before an election).

    • Where is the funding coming from? Canada’s finances are already stretched.

    • Route selection is questionable – e.g., Laval getting a stop over Mississauga/Brampton.

  • John Ruffolo’s take:

    • Financial viability is unclear – pension funds won’t invest without guarantees of ridership.

    • Other priorities (e.g., Arctic infrastructure, national security) are being ignored.

    • The government should invest in digital infrastructure instead (e.g., full 5G coverage).

AI Copyright Lawsuits: Cohere vs. Media Giants (14:35)

  • Major media coalition (The Atlantic, Forbes, The Guardian, Vox, etc.) sues AI startup Cohere for copyright infringement in New York.

    • Allegations: Cohere scraped and displayed copyrighted content without permission.

    • Seeking $150K per work infringed + an injunction against Cohere using their content.

  • Growing legal pressure on AI companies:

    • NY Times vs. OpenAI – potentially setting a massive precedent.

    • Anthropic, Meta, and Thomson Reuters have faced similar lawsuits.

  • John Ruffolo’s view:

    • Copyright concerns were always an issue for AI models.

    • AI startups may have to pay into a licensing pool (like the music industry).

    • Investor risk increasing – legal uncertainties may impact funding for public LLMs.

Trump’s Potential Tariffs: What Canada Should Do (19:25)

  • Trump’s trade policies likely to return if re-elected, impacting Canadian businesses.

  • John Ruffolo’s recommendations:

    • Canada must fix internal issues first (e.g., interprovincial trade barriers).

    • Tariffs won’t disappear for at least four years, so businesses must adapt.

    • Canadian businesses will have to shift profits & operations to the U.S. to remain competitive.

The Future of Open Banking in Canada (22:00)

  • U.S. fintech sector gains a boost as Trump administration removes CFPB regulations.

    • Chime & Klarna expected to benefit from deregulation.

  • Canadian Conservatives promise major push for open banking if elected.

    • Liberals have been slow to act on open banking despite six years of promises.

John Ruffolo’s perspective:

  • Open banking will make Canadian banks stronger, not weaker.

  • Canada must prepare for U.S. competition in financial services.

Follow Matt Cohen and Tank Talks here!

Podcast production support provided by Agentbee.ai

Discussion about this episode

User's avatar